What's the Difference Between a Bookkeeper and an Accountant?
Bookkeeping and accounting have some overlap, but they are very different roles. In this article, I share about the differences between bookkeepers and accountants including their schooling and certification needs, how much each gets paid, what the differing roles are, and how they work together. Are you interested in knowing the difference between a bookkeeper and an accountant? Then you’re in the right place!
Download the free PDF summary of the Bookkeeper vs Accountant Chart here
Watch the video here, or keep reading!
How Much Schooling Do You Need?
The first difference between an accountant and a bookkeeper is the schooling required for each role.
Accountants go to school for many years, they need to acquire a bachelor’s degree, they need two years of work experience, and they need to pass the CPA exam. On top of that, they need to keep up their continued education annually.
Bookkeeping is not a regulated field, so all that’s required is to make sure they know their software in and out, and they are able to serve their clients effectively.
Related: Do you need a certification to be a bookkeeper?
What Does a Bookkeeper and Accountant Charge?
Because accountants have additional schooling and continued education, they are able to charge a premium price for their services. Most accountants charge between $150-500 an hour depending on their specialties and what you need from them.
A bookkeeper charges less than half of the average price of an accountant. Business owners can expect to pay a bookkeeper anywhere between $35-80 an hour for their monthly services working as a contractor. If the bookkeeper is an employee, they may be making slightly less than that. The pricing really depends on their experience and what the business owner needs them to handle.
Related: How Much to Charge as a Bookkeeper
What are Their Job Descriptions?
There are variations in each of these roles, but on a normal basis, this is what you can find most accountants and bookkeepers do.
As a bookkeeper, I am managing the daily financial tasks of a business owner. I’m taking each of their bank transactions and all of their income, and I am categorizing and organizing them in QuickBooks so I can create financial statements every month (or more frequently if they would like).
I’ll give my clients a profit and loss statement of all the income they made and their expenses along with the net amount that shows how much profit they actually accrued. This is key for business owners to know how their businesses are doing.
I will also do different roles such as processing payroll, paying bills, or reconciling bank accounts to make sure that what is in QuickBooks matches their bank account. If they need invoices, I can send those, and I can also collect money as it is coming in.
A bookkeeper is usually more of a daily or weekly part of an owner’s business and is probably doing some of the tasks a small business owner was doing themselves when starting out. Once the business owner is able to hire it out, this is one of the first things they take off their plate because either they don’t have time for it and want to focus on other tasks in their business or it could have possibly gotten out of the scope of their knowledge.
On the other hand, tax CPAs are tax experts and doing the business owner’s tax preparation. They know all the tax laws, all the tax dates, and everything about how to manage the deductions.
As a bookkeeper, I think of my accountant as my manager because they are the ones leading the way and telling me how to set up my QuickBooks account. They know exactly how they want the business owner’s tax return to look, so as a bookkeeper, I can help streamline that process for them.
Related: What does a bookkeeper do video playlist
How Do Bookkeepers and Accountant Work Together
As a business owner, it is advantageous for you to have a bookkeeper because we are able to do all of the accounting and bookkeeping duties, but you would have to pay us a fraction of the rate that you have to pay your accountant.
As a bookkeeper, I usually partner with your accountant and quarterly send financial information to your accountant because you should be paying quarterly taxes. When I do this, at the quarterly mark, the accountant can look at your business and make sure your earnings are near what they expected. If you’re making way more money than they thought you would this year, they may have you pay some additional taxes, and vice versa. They can work with you and adjust the quarterly taxes you need to pay.
At the beginning of the year, I will send all the reports once more that have the past year’s financial breakdown.
It is a great idea to have both a bookkeeper and an accountant working for you in your business because they complement each other in the tasks that they do to ensure your business is taken care of on the financial side of things.
Download the free PDF summary of the Bookkeeper vs. Accountant Chart here.
Do you have any additional questions about the differences between an accountant and a bookkeeper?
